Ukraine's central bank set to prolong sanctions against Russian banks' subsidiaries

The National Bank of Ukraine (NBU) wants to prolong the sanctions imposed under a decision by the National Security and Defense Council of Ukraine (NSDC) on Russian state-owned banks' Ukrainian-based subsidiaries.

"They [sanctions] need to be prolonged," Director of the NBU Financial Stability Department Vitaliy Vavryshchuk said at a briefing on February 21.

The sanctions are expiring in March 2018.

Read alsoTigipko acquires Russian Sberbank's Ukrainian subsidiaryAccording to him, the number of banks with Russian state capital on the Ukrainian market is decreasing, and eventually they will completely leave the market both through selling their subsidiaries and reducing their presence. "We see that Russian state capital will completely leave the Ukrainian banking sector," he added.

As UNIAN reported earlier, Ukrainian President Petro Poroshenko on March 16, 2017, signed a decree to enact a NSDC decision to sanction Russian state-owned banks' subsidiaries, namely Sberbank, VS Bank, Prominvestbank, VTB Bank, and BM Bank, for a year.

The sanctions prohibit any financial transactions involving the transfer of funds to the parent banks. However, they do not affect payments handled by Ukrainian citizens through these banks, and neither do they hinder additional capitalization and sale of these financial institutions.

The regulator expected that a new investor would buy these banks or they would phase out their operation in Ukraine.

In December 2017, Sberbank Europe AG, a subsidiary of Russia's Sberbank, completed a deal to sell a controlling stake (99.9230%) in Russian Sberbank's Ukrainian subsidiary VS Bank to the TAS group owned by Ukrainian businessman Sergiy Tigipko. The remaining subsidiaries are still in Russian ownership.